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POLITICS

Civil servants ‘getting burnout’ over energy crisis, says German minister

Public sector workers trying to tackle Germany's ongoing energy crisis are suffering from illness and burnout, Economics Minister Robert Habeck has said.

Economics Minister Robert Habeck
Economics Minister Robert Habeck (Greens) sits in parliament during a vote on nuclear energy. Photo: picture alliance/dpa | Kay Nietfeld

The Russian invasion of Ukraine has unleashed economic turmoil in Europe, placing Germany’s new coalition government under pressure to firefight multiple crises.

Perhaps the largest of these is the energy crisis, which has prompted fears of gas shortages in the winter months and seen prices for fossil fuels soar for both households and businesses.

According to Economics and Climate Minister Robert Habeck, the staff at his ministry – who are charged with tackling the energy crisis – are struggling to cope with the extraordinary pressure that they have been under in recent months. 

“People, at some point they have to sleep and eat too,” the Green politician said at a congress of the Federation of German Industries (BDI) in Berlin. “It’s not bullshit I’m talking now: people get sick. They have burnout, they get tinnitus. They can’t take it anymore.”

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In the last nine months alone, the Economics Ministry has produced 20 laws and 28 ordinances, Habeck revealed. He said this was likely more than the ministry produced over the entirety of the previous four-year legislature. 

Highlighting the strain that his staff were under, Habeck explained that it was always the same people in charge in drafting new laws in the battle to secure the energy supply.

To say that the Tourism Ministry could help restructure the electricity market would be like “telling the artist who made the sculptures that he can be the president of the Federation of German Industries,” the Green politician added. 

Batting off criticism that the ministry had occasionally been slow to act, Habeck said: “Of course you could say, ‘why didn’t you do the regulation a week earlier’. But it’s not because people are sleeping, it’s because there is a limit to their physical capacity.”

Gas levy criticism 

Germany has had to cope with an ever intensifying energy emergency over the past few months, culminating in Russia reducing supplies and then turning off gas deliveries via the Nord Stream 1 pipeline entirely in September. 

Most recently, the government took steps to nationalise its largest gas supplier – Uniper – in a move to prevent the collapse of the country’s energy infrastructure. Uniper has suffered losses of billions of euros this year due to the costs involved in replacing cheap Russian gas supplies at short notice. 

Habeck, who has appeared increasingly world-weary and exhausted in recent months, has faced sharp criticism for a number of decisions made during the crisis. 

Most controversially, his decision to implement a gas levy to bail out major energy companies has been met with consternation from both the opposition and the Greens’ coalition partners, the Social Democrats (SPD). 

On Friday, SPD leader Lars Klingbeil reiterated concerns about the fairness of the gas levy at a time when many are struggling to pay their energy bills.

SPD leader Lars Klingbeil

SPD leader Lars Klingbeil speaks to the press during the ARD Summer Interview in Berlin. Photo: picture alliance/dpa | Fabian Sommer

In a situation where the government is facing multiple decisions in a short space of time, ministers also require the strength to “reconsider and correct their path”, Klingbeil told RND.

“(The gas levy) is about supporting the gas supply infrastructure,” he added. “However, this must be done fairly.”

In spite of the nationalisation of Uniper, Habeck has confirmed that the gas levy – which adds 2.4 cents per kilowatt hour of energy onto gas bills – will still be introduced on October 1st.

However, on Thursday he announced that there would be changes to Energy Security Act to ensure that only companies who needed the bailout would benefit from the levy.

According to the ministry, the changes are set to be passed by the cabinet on September 28th.

READ ALSO: Germany to push ahead with gas levy plans

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ECONOMY

‘Turning point’: Is Germany’s ailing economy on the road to recovery?

The German government slightly increased its 2024 growth forecast Wednesday, saying there were signs Europe's beleaguered top economy was at a "turning point" after battling through a period of weakness.

'Turning point': Is Germany's ailing economy on the road to recovery?

Output is expected to expand 0.3 percent this year, the economy ministry said, up from a prediction of 0.2 percent in February.

The slightly rosier picture comes after improvements in key indicators — from factory output to business activity — boosted hopes a recovery may be getting under way.

The German economy shrank slightly last year, hit by soaring inflation, a manufacturing slowdown and weakness in trading partners, and has acted as a major drag on the 20-nation eurozone.

But releasing its latest projections, the economy ministry said in a statement there were growing indications of a “turning point”.

“Signs of an economic upturn have increased significantly, especially in recent weeks,” Economy Minister Robert Habeck said at a press conference.

The ministry also cut its forecast for inflation this year to 2.4 percent, from a previous prediction of 2.8 percent, and sees the figure falling below two percent next year.

READ ALSO: Can Germany revive its struggling economy?

“The fall in inflation will lead to consumer demand — people have more money in their wallets again, and will spend this money,” said Habeck.

“So purchasing power is increasing, real wages are rising and this will contribute to a domestic economic recovery.”

Energy prices — which surged after Russia’s 2022 invasion of Ukraine — had also fallen and supply chain woes had eased, he added.

Several months ago there had been expectations of a strong rebound in 2024, with forecasts of growth above one percent, but these were dialled back at the start of the year as the economy continued to languish.

‘Germany has fallen behind’

But improving signs have fuelled hopes the lumbering economy — while not about to break into a sprint — may at least be getting back on its feet.

On Wednesday a closely-watched survey from the Ifo institute showed business sentiment rising for a third consecutive month in April, and more strongly than expected.

A key purchasing managers’ index survey this week showed that business activity in Germany had picked up.

And last week the central bank, the Bundesbank, forecast the economy would expand slightly in the first quarter, dodging a recession, after earlier predicting a contraction.

German Economics Minister Robert Habeck

Economics Minister Robert Habeck (Greens) presents the latest economic forecasts at a press conference in Berlin on Wednesday, April 24th. Photo: picture alliance/dpa | Michael Kappeler

Despite the economy’s improving prospects, growth of 0.3 percent is still slower than other developed economies and below past rates, and officials fret it is unlikely to pick up fast in the years ahead.

Habeck has repeatedly stressed solutions are needed for deep-rooted problems facing Germany, from an ageing population to labour shortages and a transition towards greener industries that is moving too slowly.

“Germany has fallen behind other countries in terms of competitiveness,” he said. “We still have a lot to do — we have to roll up our sleeves.”

READ ALSO: Which German companies are planning to cut jobs?

Already facing turbulence from pandemic-related supply chain woes, the German economy’s problems deepened dramatically when Russia invaded Ukraine and slashed supplies of gas, hitting the country’s crucial manufacturers hard.

While the energy shock has faded, continued weakness in trading partners such as China, widespread strikes in recent months and higher eurozone interest rates have all prolonged the pain.

The European Central Bank has signalled it could start cutting borrowing costs in June, which would boost the eurozone.

But Habeck stressed that care was still needed as, despite the expectations of imminent easing, “tight monetary policy has not yet been lifted.”

In addition, disagreements in Chancellor Olaf Scholz’s three-party ruling coalition are hindering efforts to reignite growth, critics say.

This week the pro-business FDP party, a coalition partner, faced an angry backlash from Scholz’s SPD when it presented a 12-point plan for an “economic turnaround”, including deep cuts to state benefits.

Christian Lindner, the fiscally hawkish FDP finance minister, welcomed signs of “stabilisation” in the economic forecasts but stressed that projected medium-term growth was “too low to sustainably finance our state”.

“There are no arguments for postponing the economic turnaround,” he added.

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